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"Not everything that is faced can be changed, but nothing can be changed until it is faced."-- James Baldwin

Jeff Faux founded the Economic Policy Institute in Washington DC, where he is now Distinguished Fellow. His latest book is The Servant Economy: Where America's Elite is Sending the Middle Class (June 2012. Wiley). He also wrote The Global Class War, and five other books. He has lectured widely in the US and abroad. Among other experiences, he has been a government economist, a finance company manager, a merchant seaman, a bartender and a blueberry farmer.

Interview, Part 4: Romney Will Bring the Far Right to Power at All Levels

Money talks.. It is also a conversation stopper. Almost any discussion among progressives of what is really needed to solve the nation’s multiple crises typically ends in despair when someone says, “But they will not accept that,” they being the corporate rich and powerful, what a Texas friend of mine used to call Big Dollar.

Wall Street will not accept re-regulation. Health insurance corporations will not accept a public option, much less single payer. Energy companies will not accept a serious effort to reduce global warming. And so it goes. With the exception of social move- ments about which Big Dollar is indifferent (same-sex marriage) or mildly supportive (liberalizing immigration), progressive politics is on the defensive.

Money corrupts politicians through many channels: the hint of a future job or lobbyist contract when you leave office, invita- tions to exclusive dinner parties where you can network with the rich, a hedge fund internship for your daughter, a stock market tip. But, as Lawrence Lessig points out in this important book, all of this depends on your remaining in power, so nothing matches the importance of raising enough money to get yourself reelected. And nothing makes you more responsive to a lobbyist than the knowledge that he or she speaks for a poten- tially large donor to your next campaign.

Nowhere is the enfeeblement of the liberal vision more striking than in the issue of money in politics itself. The January 2010 Supreme Court’s Citizens United decision has

set off a tsunami of “super PAC” election spending protected by a fig leaf rationale that it be formally independent of a candidate’s campaign.

The decision is a dagger at the throat of what is left of the Democratic Party’s function as the progressive alternative in our two-party system. Yet the party leadership’s response has been pathetic—a tepid and unsuccessful proposal by Senator Charles Schumer of New York, himself a huge beneficiary of Wall Street

Democrats quickly developed an addiction to campaign money from Big Business, whose pockets under Reaganomics were far deeper than Big Labor’s.

contributions, to require that super PACs disclose the identity of their contributors.

Lessig, who teaches at Harvard Law School, is justifiably alarmed that campaign spending is destroying democracy, and he has written a sharp and accessible brief for radical reform. Although he falls just short of a credible solution, he moves us far enough along so that we can take the final steps on our own.

Money has always been important in American elections. Among its many mani- festations, vote-buying at the polls and in the Congress and state legislatures was common in the nineteenth century, and, in some places, well into the twentieth. The result was a government that openly and shamelessly sided with capital against labor, until Franklin Roosevelt’s election.

The New Deal did not end Big Dollar’s influence. Money remained, as Jesse Unruh, the Democratic speaker of the California Assembly during the glory days of that state’s liberalism, famously quipped, “the mother’s milk of politics.” But with the rise of labor and other liberal sources of campaign funds, the nourishment was more evenly divided, and therefore less decisive in the conflicts over government policy.

Then something changed. Lessig dates the change to Newt Gingrich’s becoming speaker of the U.S. House after the 1994 election. Gingrich made fundraising a central part of the management of the Congress. He abolished seniority and established what political scientist Tom Ferguson has called the “posted price” system of selling subcommittee and committee chairs to members able to meet certain fundraising goals for the party.

But the Republican Party was traditionally the instrument of big business. The more important story is what happened to the Democrats a decade earlier. After Ronald Reagan’s election in 1980, Tony Coelho, a Democratic congressman from California with Wall Street connections, convinced the party leaders that they should become more proactive in raising money from big business. Big Dollar will court us, argued Coelho, because, as everyone “knew,” the Democrats had a lock on the House (which they had controlled for all but four years since 1933), where the tax and spending bills originated. So, liberals could take the money without selling out their principles.

An early test of this proposition on the national stage came in the presidential election campaign of 1984. Former vice- president Walter Mondale, the Democratic nominee, originally wanted to run on a plan to save American manufacturing jobs. But after a few dinners with Wall Street contributors (organized by Robert Rubin of Goldman Sachs, later Bill Clinton’s Treasury secretary), who were more worried about keeping bond prices up than the unemployment rate down, he switched to a pledge to reduce the federal deficit, even if it meant raising taxes.

Mondale went down in a landslide defeat to Ronald Reagan. Nevertheless, Democrats quickly developed an addiction to campaign money from Big Business, whose pockets under Reaganomics were far deeper than Big

Labor’s. When the Democrats lost the House in 1994, their bargaining power with business shrunk considerably, and Coelho’s promise that they could sup with the corporate devil and keep their political virtue went up in smoke.

One result was Wall Street’s by now well- documented dominance of the economic policies of Bill Clinton and Barack Obama. As corporate influence rose, labor’s declined. Both Clinton and Obama reneged on their pledges to reform labor laws that have become an obstacle to organizing. When Obama’s chief of staff, Rahm Emanuel, was quoted as having said, “Fuck the UAW” [United Auto Workers] during the rescue of General Motors, there was not even a mild rebuke from his boss.

That America has become a plutocracy is by now widely accepted by most of the electorate. Lessig reports that 75 percent of Americans (Republicans, 71 percent; Democrats, 81 percent) believe that “campaign contributions buy results in Congress.”

Yet the influence of money on policy goes largely unacknowledged in the electronic and print chatter of our national political discourse. Mainstream journalists will note that campaign funds are a measure of a candidate’s credibility. But they treat the raising of those funds as if it were a function of a candidate’s charm, rather than an investment on which donors expect a return.

Given that political advertising is a source of their revenue, it’s no wonder that corporate- owned television stations and newspapers prefer that their talking heads not delve too deeply into the connection between campaign contributions and policy. Indeed, many conservative and centrist pundits and politicians claim that, despite what the unsophisti- cated public might think, political science has found little evidence that campaign contributions influence policy.

One of Lessig’s contributions is that he savages these claims in a way that readers who are neither lawyers nor political scientists can easily understand.

By and large, studies that downplay the influence of money on policy attempt to connect two variables—recorded campaign contributions and recorded roll call votes in the Congress. Lessig calls this the quid pro quo model of political corruption—my check for your vote.

But that’s not the way it usually works. Most political corruption occurs in the context of what Lessig calls the “gift” relationship, in which campaign contributions are made with no specific strings attached, but rather to establish the politician’s dependence on the donor.

Identifying the donor side of the gift equation is difficult: the money is filtered through PACs and super PACs, bundled to hide individual contributions, written on the accounts of employees rather than the boss, and so on. Moreover, Big Dollar gets leverage just by, well, being big and having a lot of dollars. Thus, for example, the mere threat that big donors might spend against you in the next election is often enough to keep you in their corner at the next subcommittee mark-up.

On the receiving side, the gift is reciprocated in ways that are also not easily researchable. For example, the key decisions on a significant piece of legislation are often made in informal conversation or by the well-timed raising of an eyebrow before it gets written up as a bill and further shaped along the way by subcommittees, committees, and in complicated procedural votes. Indeed, it is not uncommon for a member to cast a recorded vote in favor of a bill that he or she has diligently worked to make ineffective.

Dependency corruption starts early on the way up the career ladder. Gloria Totten of Progressive Majority, a group that helps develop liberal candidates for local and state offices, tells me that the first question Democratic Party leaders ask about a potential candidate is “almost always about money; whether they can write their own checks or can raise it from business.”

As politicians who are not rich them- selves move through the system, they become adept at anticipating—and internalizing—the interests of those who write the checks. So when members of Congress bristle at the suggestion that their votes have been influenced by certain campaign contributions, the reaction is often genuine. They did not have to sell their vote; they vote the way they do because they think like their contributors.

Moreover, members of Congress who spend three-quarters of their day raising money don’t have time for independent thought. They don’t read most of the bills they vote on, they don’t attend their committee meetings, and they spend less and less time on the job. Lessig reports that between the 1970s and the decade of the 2000s the annual number of days in which the House of Representatives was in session dropped by about seventy.

So, what to do?

“Transparency” in campaign financing— requiring public disclosure of donors—is marginally useful, but hardly enough. Lessig gives the reader a clever demonstration of why: a mind-numbing four pages listing 240 separate donors to the campaign of a liberal Democrat from Massachusetts that tell the reader next to nothing.

He is also skeptical of some ingenious proposals requiring that campaign contributions be anonymous to the recipient. Lessig is intrigued, but thinks it is too complex for the public to trust.

Although he is sympathetic, he also rejects the public financing of elections that three states—Arizona, Connecticut and Maine— have adopted. The basic model is for candi- dates to raise a certain threshold sum from small donors, which qualifies their campaign for public support if they don’t take any other money. Since 1976, public financing has been available for presidential candidates who agree to forswear private donations.

Public financing has a number of problems. It cannot match what candidates blessed by Big Dollar can raise by themselves. Candidate Barack Obama rejected it in 2008 and outspent John McCain, who accepted it. This time around, both Obama and Mitt Romney are raising money on their own. Moreover, the idea that taxpayers should finance political campaigns of corruptible politicians is a hard sell to the public in the best of times, much less in an age of austerity; more than 90 percent of taxpayers decline to check the box that would allocate just $3 of their income taxes to public financing of presidential campaigns, at no additional costs to them- selves. Nor does public financing deal with the super PACs.

But curiously, these are not the reasons for Lessig’s disapproval. Rather, he believes “bureaucrats” should not decide how much money should be spent on elections, and that taxpayer money should not go to candidates with whom they might disagree.

As Lessig reminds us, he is an ex-conservative—former chair of Pennsylvania’s Teenage Republicans and clerk for Antonin Scalia. His political hero is Louisiana Republican (and former Democrat) Buddy Roemer, who made an aborted bid for the 2012 Republican nomination.

So, in what has now become a tradition among centrists struggling to convince conservatives that they too are against Big Government (“We know who the enemy is,” he writes. “They live within the Beltway”), Lessig offers us vouchers. He proposes that all taxpayers get a $50 Treasury chit that they can donate to the candidate of their choice.

If they don’t use it, the money goes to the party in which they are registered. If they are independents, it goes to support programs such as voter education (presumably run by the disdained “bureaucrats”). Candidates who choose to receive voucher money (plus a limit of $100 per donor in supplementary individual contributions) agree not to take any other monies.

Lessig dismisses the estimated price tag— six billion dollars for congressional campaigns alone—as peanuts. Maybe. But in any event, the government’s subsidy would have to keep up to match the rising costs of campaigning and Big Dollar’s willingness to pay it. Even if the value of the vouchers were raised enough to attract candidates, it would surely generate another campaign—on top of our already agonizingly long election season—to compete for the vouchers.

Like public financing, Lessig’s proposal also fails to address the issue of “independent” expenditures, which will only get worse. As Obama—a former professor of constitutional law—pointed out, the logic of the Citizens United decision suggests that foreign corpo- rations also be allowed to make unlimited contributions to American political campaigns.

Because foreigners already have the right to free speech, it would follow that foreign corporations also have that right. (Those that have American subsidiaries already do.)

To this reviewer it seems clear that no solution is possible unless we can amend the Constitution to declare once and for all that money does not equal speech and corporations are not persons.

Consistent with their diminished horizons, the conventional wisdom among liberal activists is that the amendment route is impractical; it can’t be done, and if it can it will take too long. It requires approval by a two-thirds vote in each house of Congress and ratification by three-fourths of the states. An alternative is for two-thirds of the states to establish a constitutional convention to decide on an amendment.

For many progressives, just the thought of a constitutional conventional makes them weak in the knees. And here, Lessig makes another contribution to this debate. In speculating that a constitutional convention might be necessary

to achieve his voucher plan, he argues effectively that this fear is wildly excessive and reflects a lack of faith in democracy itself.

In addition to the not unimportant fact that it is the only way in which the Big Dollar problem can be solved, there are good practical arguments for giving an amendment high priority now, starting with the fact that the overwhelming majority of Americans— from Wall Street Occupiers to the Tea Party rank-and-file—disagrees with Citizens United decision and thinks that money is corrupting our democracy. Moreover, unlike the amendments proposed by the Right (against abortion, flag burning, same-sex marriage,

or for prayer in the schools) regulating the money in politics is truly a constitutional question. It is exactly why the founders provided for amendments.

And inasmuch as states must ratify the amendment, it could generate a widespread debate, one that is at the heart of our national crisis. Such a debate would be immensely valuable in itself and could accelerate a march through the amendment process.

Political insiders point out that reforming campaign spending does not seem to be a top priority among surveyed voters. But this is because it is invariably presented as an abstract issue, of interest mostly to law school professors and “good government” liberals.

It may be the moment to liberate the issue of plutocracy from this high-minded political ghetto. The response of the country’s elite to the economic crisis—that is, welfare for corporate America and a brutally competitive labor market for the rest of us—has laid bare the way in which political contributions influence the economic fate of the typical American. Class lines are hardening. The highly touted service economy is morphing into a servant economy of low wages, insecure work, and eroding personal dignity. Connecting the dots between Big Dollar and that bleak future should not be too difficult.

Where would the energy for such a movement come from? Certainly not from Washington. As Lessig observes, “The one

thing that every incumbent has done under the current system is win.” But the nation outside the Beltway is clearly dissatisfied with that current system. This November a large number of both Obama and Romney voters will go to the polls holding their noses.

A collaborative mobilization by progres- sives that can reach out to the disaffected middle and even parts of the confused Right is certainly imaginable. Lessig’s book helps to widen our horizons.

As with most serious efforts at change, the odds may be long. But even longer are the odds that Americans can deal effectively with the twilight of our economic empire without radically reducing the dominance of Big Dollar over our democracy.

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• Provocative and brutally honest, this book takes up where almost all current books on the economic and political crisis leave off, looking not simply at how we got here, but where we are going.

Americans are in denial...Our much-touted service economy will become a "servant" economy. Debt-laden 20-someting college graduates will become 30- and 40- somethings, still juggling dead-end jobs. Pesonal dignity will go the way of decent pay....
The core problem, argues Faux, is not that we don't know what to do...
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